Rate Terms and ApplicationsApril 5, 2018
When it comes to understanding rate terms, the Outdoor Hospitality industry is a little behind the curve. Often when speaking to a group, we find that terms such as “Rack Rate,” and “BAR Rate,” are not readily understood outside the hotel world.
Rack Rate in simple terms is the highest published rate available for a site type. In our systems, we work off Rack Rate.
BAR rate is an acronym for “Best Available Rate.” You see this term used often on hotel sites and OTA’s such as Booking.com.
BAR is used often when yielding is taking place and the rate changes. A guest does not see or is not quoted a fixed rate, but rather the Best Available Rate on the day and at the time of their booking.
When yielding rates, we work off Rack. Rack is discounted down until certain criteria allow us to start working up to straight Rack. When we are hitting certain occupancies and inventory is low, our discount off Rack begins to shrink. Whereas our Standard Pricing might be 35% off Rack, as we yield upward, we reduce the discount based on trends. Conversely, if we are not picking up site nights as we hope, we increase our discount percentage until our pickup is where we want it to be, and then we decrease the discount once again. Therefore, every day our published rate is BAR-“Best Available Rate” for this day and time.
When AOS manages your property, our highly experienced team works in the background so all you do is book sites. Our cloud based system allows our revenue managers to manipulate your sites for higher returns. We look at rates daily and hold weekly calls to discuss our strategies. Our management clients are true case studies in how to win in the world of rate yielding and management.